Once your NSLU2 is flashed with the new firmware, you'll probably want to upgrade to the newer version of Busybox. Generally, this will do it:
Once this is done, the newer busybox will be installed into /opt/bin/busybox. The problem here is that the existing busybox in /bin will be first in your PATH environment variable. In order to fix this, change the shell portion in /etc/passwd like:
and create a /etc/shells file like:
~ $ cat /etc/shells
You need the /etc/shells so that dropbear (if it's installed) allows the /opt/bin/sh as a valid shell upon login.